The Budget: Support for businesses in managing the impact of the coronavirus

The Chancellor announced a package of measures at the Budget on 11 March 2020 for assisting businesses with cashflow problems arising from the outbreak and to help protect peoples’ jobs.  Businesses have had to explore a number of measures, such as temporarily laying off staff due to a downturn in demand and reviewing their existing contingency plans.  The measures announced today will certainly go some way towards assisting small businesses in particular.    

Business Rates

The Government has already announced the Business Rates retail discount will be increased to 50% in 2020-21. To support small businesses affected by the coronavirus outbreak, the Government is increasing it further to 100% for 2020-21.

HMRC Helpline

The Government has set up a dedicated helpline to assist businesses facing cash-flow difficulties to agree a deferral period for paying taxes owed.  HMRC will also waive late payment penalties and interest where a business experiences administrative difficulties contacting HMRC or paying taxes due to the coronavirus. 

Temporary Reform of the SSP Rules

In response to the coronavirus outbreak, the Government has announced that they will introduce emergency legislation to reform the SSP rules so that SSP becomes available to those that are incapacitated and/or self-isolating as a precaution as a result of coronavirus from day one, instead of day four as is currently the case i.e. the 3 waiting days for SSP will be removed.  This proposed change to the SSP rules has not yet come into force and details of the new proposed legislation are yet to be published. However, it was announced in the Budget that:

SSP will be extended to those who are advised to self-isolate as a precaution (i.e. not just those who have contracted coronavirus), and those caring for others who self-isolate as a result of coronavirus. 

The Government will reimburse small and medium employers (i.e. those employing fewer than 250 employees, as determined by the number of people they employed as of 28 February 2020) any statutory sick pay they pay to employees for the first 14 days of sickness as a result of coronavirus.

Under the new rules, employers should maintain records of staff absences, but should not require employees to provide a GP fit note.  

As the Temporary Threshold Scheme which previously permitted small businesses to reclaim SSP from the Government was abolished in 2014, the Government will set up a new repayment mechanism for employers for reclaiming SSP in due course.

For individuals who are not entitled to SSP, such as the self-employed and those that fall below the Lower Earnings Limit, a ‘new style’ Employment and Support Allowance through the welfare system will be payable for people directly affected by coronavirus or who are self-isolating according to government advice, from the first day of sickness or self-isolation. 

At Markel Law we regularly comment on SME related matters.

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